Standard Pacific Eyes Marblehead

REAL ESTATE: Plans to spend $400M+ on land in 12Mark Mueller
Sunday, May 6, 2012

Standard Pacific Corp.

• Headquarters: Irvine

• Business: homebuilder

• Founded: 1965

• Ticker symbol: SPF (NYSE)

• Market value: About $1.07 billion

• Notable: targets “move up” buyers

Nearly half of the $66 million spent last quarter went toward land development, according to the builder, whose development expenditures have run from $31 million and $34 million for each of the last five quarters.

Last quarter’s decline in land buys is more an issue of timing, officials said last week.

The company expects to spend $400 million or more on land-related costs this year.

Standard Pacific has tended to buy partially developed or undeveloped properties—such as Marblehead—of late. A few years ago a bulk of the builder’s buys was for finished land sites.

Fits Mold

Marblehead’s high-end orientation also fits the Standard Pacific mold. About 75% of the builder’s sales last quarter were to “move-up” buyers.

“It’s what we’re good at,” Stowell said.

Standard Pacific reported closing 642 home sales in the quarter for an $8.5 million profit. That compared with a $14.8 million loss a year earlier.

The first quarter of the year is traditionally slow for sales and the toughest time for builders to turn a profit. This year marked the first time Standard Pacific was able to post a profit in the quarter since 2006.

After a strong end to 2011, “the positive momentum has continued into the first quarter,” Stowell said.

Another sign of a possible improvement in the market was reduced reliance on purchase incentives, which officials said are at their lowest levels in three years.

“You won’t find a single incentive on our website,” Stowell said.

Pricing has climbed an average of 1% to 2% at the company’s 160 active communities, according to the builder.

Some higher-end projects are seeing pricing boosts in the 8% range, officials said.

An unspecified community in Southern California has seen pricing upped by nearly $140,000 from earlier levels, according to the company.